What kind of “basic accounting” questions can I expect for a pre-interview practice test?

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1. For a pre-interview practice test focused on basic Accounting, especially for a role involving investment funds, you can expect questions that cover fundamental Accounting concepts and practices. Here are some potential topics and questions to prepare for:

   1. Basic Accounting Principles:
   2. What are the four main financial statements, and what does each one represent?

   3. Explain the difference between cash basis and accrual basis accounting.

   4. Journal Entries (JE):

   5. Describe how to record a journal entry for deferred income.

   6. Provide a journal entry for recognizing an expense that has been incurred but not yet paid.

   7. Accruals and Deferrals:

   8. What are accruals, and why are they important in accounting?

   9. Can you explain deferral accounting and give an example?

   10. Revenue Recognition:

   11. When is revenue recognized according to GAAP (Generally Accepted Accounting Principles)?

   12. How would you recognize revenue from a service that has been provided but not yet billed?

   13. Basic Financial Analysis:

   14. What is the difference between current assets and non-current assets?

   15. How would you calculate net income?

   16. Accounting Equation:

   17. What is the accounting equation (Assets = Liabilities + Equity), and why is it important?

   18. How do you ensure the accounting equation is balanced?

   19. Basic Ratios:

   20. Explain what the current ratio is and why it’s important for analyzing a company’s financial health.

   21. What is the debt-to-equity ratio, and what does it indicate about a company?

   22. Investment Funds Specific:

   23. What is net asset value (NAV), and how is it calculated?

   24. Can you explain the concept of management fees and their impact on an investment fund’s performance?

   25. Common Accounting Terminology:

   26. Define terms like liabilities, equity, dividends, and amortization.

   27. What is the difference between fixed and variable costs?

   28. Practical Scenarios:

       • If a company receives cash in advance for services to be rendered in the future, how should this be recorded?
       • How would you adjust entries at the end of an accounting period for accrued expenses?

   Preparing answers to these types of questions will help you feel more confident going into the interview. Good luck!

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